Tuesday, March 27, 2007

Dairy and juice firms warned over pricing plans :: Gulf News

Abu Dhabi: The Ministry of Economy yesterday warned major dairy and fruit juice companies that unless they retract their price hike demands they will face tough action. "Legal action will be taken against companies which fail to abide by the current prices in accordance with article 18 of the Federal Consumer Protection Law No 24/2006," a statement issued by the Consumer Protection Department said.

The move came after a number of major dairy and fruit juice companies have demanded price increases of up to 33 per cent from next month. The statement dismissed the monopolistic practices as "harmful to consumers and the national economy" and said monopoly was ensured through lobbying and implicit agreements among dairy and juice products companies.

The statement named six companies, which illegally sought to hike prices: Al Marai Company, Al Ain Dairy Company, Al Rawabi Dairy, Mohamed Abdullah Al Othman Trading Corporation and Gulf Dairy and Safa Company....Dr Ahmad Al Tijani, general manager for the Al Rawabi Dairy Company and chairman of the UAE Dairy and Juices Association, said the association did not take a decision to increase the prices. "It was a decision taken by individual companies but not at the association's level," he said.

It is good to see the government intervene in monopolistic practices. While the decision to increase prices was not an association decision, I do have a concern that the individual companies became accustomed to pricing agreements because of their experience in the association.